Review of Economic Statistics — March 8, 2019 - Transcript
(The Statistics Canada symbol and Canada wordmark appear on screen with the title: "Review of Economic Statistics — March 8, 2019")
(Background music plays while title card with the text "Review of Economic Statistics" appears on screen.)
Richard Evans: Welcome to the Review of Economic Statistics. I'm Richard Evans.
Guy Gellatly: I'm Guy Gellatly.
(Text on screen below presenters: "Richard Evans, Director General, Industry Statistics. Guy Gellatly, Principal Researcher.")
Richard Evans: Guy, we're at an interesting part of the economic cycle. We have some good data for the first quarter of 2019, but we also have the definitive picture for 2018 with the GDP report. But let's start with the fresh data—I'm referring to the Labour Force Survey and the employment report for February. November of last year showed some strong growth in jobs. The year got off to a strong start in January, as well. Did that extend into February?
Guy Gellatly: Another solid headline gain, Richard, in February, as employment rose by 56,000, all of that net increase really coming in terms of full-time work. Higher youth employment was a factor in February as well, youth accounting for about one-half of the overall increase that we saw in February. It builds on that strong youth number that we had in January to start the year off.
(Text on screen below presenters: "Employment rose by 56,000 in February as the unemployment rate held steady at 5.8%.")
Richard Evans: What about provincially? Anything happening regionally?
Guy Gellatly: A lot of the growth in February coming from Ontario, led really by gains in full-time, so higher employment in construction and in professional services contributing to growth in the province.
Richard Evans: So this growth in jobs, was it enough to cause the unemployment rate to fall?
Guy Gellatly: No, nationally, the unemployment rate held steady at 5.8%.
Richard Evans: So that's the employment report. As you very well know, there is more to the economic puzzle than jobs, and to get the definitive picture, we look at the GDP report, which includes everything— consumption, investment, trade, it's got all the elements—and the fourth quarter report is just out. Let's look at that. I saw a bunch of economic indicators slow in the fourth quarter—monthly manufacturing, wholesaling, retailing—so I'm kind of expecting a weaker number in the fourth quarter. Am I right?
Guy Gellatly: Yes, slower growth. The real gross domestic product edging up 0.1% in the fourth quarter, so a slight gain there. It's actually the slowest—or the smallest—quarterly increase that we've had in two and a half years.
(Text on screen below presenters: "Real gross domestic product edged up 0.1% in the fourth quarter of 2018.")
Richard Evans: To get that kind of result, there must have been some parts of the report that were outright negatives. What stood out for you there?
Guy Gellatly: Well, basically a couple of factors behind that slowdown. The continued decline in non-residential business investment, so think about business spending on machinery and equipment, on engineering structures, on buildings. Plant and equipment. All of that was down in the fourth quarter. At the same time, we had lower investment in housing. It was actually down 3.9%.
(Text on screen below presenters: "Non-residential business investment continued to decline in the fourth quarter.")
Richard Evans: What does that include?
Guy Gellatly: Well, you have declines in new construction and renovations, and in resale activity, and that really builds on some of those weaker housing numbers that we have seen through much of 2018.
Richard Evans: Household spending—that had been growing but at a slower and slower pace as the year advanced. What happened in the fourth quarter?
Guy Gellatly: Exactly the same. Household spending up 0.2%, so it's growing, but at a slower pace.
Richard Evans: Small growth.
Guy Gellatly: Right. A lot of the increase in household spending really coming from the spending on services. At the same time, we actually had a decline in spending on durables, and a good example really is spending on autos. That has actually been negative for four quarters in a row.
Richard Evans: Very good. Did trade provide any lift?
Guy Gellatly: In terms of economic growth, you got a slight boost from net trade, but that's basically coming from lower imports, or a decline in imports, as exports also edged down in the fourth quarter.
Richard Evans: So if I understand, imports and exports both fell, but imports fell by more, and that caused a slight lift. Complicated, but I think I get it. Now, let's look at 2018 as a whole because the fourth quarter completes the year. What did the growth picture look like?
Guy Gellatly: For Canada, economic growth coming in at 1.8% for 2018 as a whole. That's down from 3% in 2017. If you compare across the border, growth in the United States in 2018 coming in at 2.9%.
Richard Evans: So we're at slower growth than last year and slower growth than our American cousins. Very good. Thank you for that, Guy.
Guy Gellatly: Thank you.
Richard Evans: To close out, I just want to mention that we have a brand-new infographic on our website. It allows its viewers to compare household debt levels and their income levels across different cities in Canada. For that and so much more, please check our website.
(Text on screen below presenters: "www.statcan.gc.ca")
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